REPUBLIC OF MOZAMBIQUE Investment and Export Promotion Agency (APIEX)

3rd AFRICA INVESTMENT PROMOTION

FORUM

Investment Climate and Business Opportunities in Mozambique

London and Paris, 03 to 07, 2019

by: Lourenço Sambo - Director General

PRESENTATION LAYOUT

WHY MOZAMBIQUE

LEGAL FRAMEWORK AND BUSINESS OPORTUNITIES

ROLE OF APIEX

1

2

3

OUR ATTRACTIVE INVESTMENT ENVIRONMENT

Rich and Diverse Natural Resources Base

Young and educated work force

Access to preferential markets: SADC, USA, EU, China, India

Openness to Investment (welcoming, predictable and transparent investment climate)

OUR ATTRACTIVE INVESTMENT ENVIRONMENT

Provision of tax & non-tax incentives

Protection against property expropriation

Non-discriminatory treatment between foreign and domestic investors

No restriction to loans and payment of interests abroad

Sincerity, Hospitability, Friendliness

Copyright©2017 JETRO. All rights reserved.

5

2016 Nominal GDP (1 billion USD)

GDP per capita(USD)

Population (Million)

1. Nigeria (World Rank 24th） 405.95 (18.6%) 2,210.64 183.64

2. Egypt （32nd） 332.35 (15.2%) 3,684.57 90.20

3. South Africa（39st） 294.13 (13.5%) 5,260.90 55.91

4. Algeria 160.78 ( 7.4%) 3,944.43 40.76

5. Morocco 103.62 ( 4.7%) 3,063.07 33.83

6. Angola 95.82 ( 4.4%) 3,502.27 27.36

7. Sudan 94.42 ( 4.3%) 2,384.45 39.60

8. Ethiopia 72.52 ( 3.3%) 795.23 91.20

9. Kenya 68.92 ( 3.2%) 1,516.33 45.45

10. Tanzania 47.18 ( 2.2%) 970.21 48.63

11. Ghana 43.26 ( 2.0%) 1,569.04 27.57

12. Tunisia 41.87 ( 1.9%) 3,730.42 11.22

13. DRC 41.62 ( 1.9%) 494.65 84.13

14. Ivory Coast 35.49 ( 1.6%) 1,458.83 24.33

15. Libia 33.16 ( 1.5%) 5,193.24 6.39

26. Mozambique 11.28 (0.5%) 392.44 28.75

FDI flows (mil $) 2014 2015 2016 FDI Stocks(mil $) 2014 2015 2016

1 Angola 16543.2 16176.4 14363.6 1 South Africa 138905.6 126755.5 126837.2

2 Egypt 4612.0 6925.2 8106.8 2 Egypt 87485.0 94307.0 102324.0

3 Nigeria 3357.0 3192.3 3485.3 3 Nigeria 86671.2 89735.4 94184.1

4 Ghana 3357.0 3192.3 3485.3 4 Morocco 51192.0 49670.5 54784.2

5 Ethiopia 1855.2 2192.7 3196.4 5 Angola 25899.8 35181.9 49545.5

6 Mozambique 4901.8 3866.8 3093.4 6 Mozambique 24870.0 28736.5 31830.0

7 Morocco 3561.2 3254.8 2321.8 7 Ghana 23205.1 26397.4 29882.3

8 South Africa 5770.6 1729.4 2270.4 8 Tunisia 31563.0 34689.5 29304.8

9 Congo 5502.6 1866.0 2006.0 9 Algeria 26819.6 26232.3 27778.3

10 Algeria 1506.7 -584.0 1546.0 10 Congo 22009.7 23875.7 25881.7

Africa Total 71254.0 61494.8 59373.0 Africa Total 743227.3 773070.6 836553.0

Top 15 countries in Africa in terms of Economic Scale (2016)

FDI into Africa between 2014 to

2016

Left：Flows Right：Stocks

Data source：IMF World Economic Outlook 2017 April

Data source:UNCTAD

MAJOR INVESTMENT DESTINATION IN AFRICA

TOTAL INVESTMENT INFLOW IN MOZAMBIQUE (2014-2018)

6

Agriculture and Agro-industry

7%

Aquaculture and Fisheries

5%

Construction and Public Works

6%

Energy

26%

Industry

20%

Services

19%

Transportation and Communications

8%

Tourism and Hospitality

9%

MOZ Total Investment flow (2014-2018)

• Energy has the

largest % of

investment inflow

(2014-2018) : 26%

• It is followed by

Industry (20%) and

Services (19%)

• Agriculture and

Agro-industry

received merely 7% of

the total investment

inflows during the

period

Source：APIEX 2019

LEGAL FRAMEWORK

AND BUSINESS

OPORTUNITIES

• Banco Nacional de Investimento • 7

TAXATION SYSTEM

IMPORT CUSTOMS

DUTIES

Equipment 5.0%

Raw Material 2.5%

Semi-finished products

7.5%

Finished products

20.0%

VAT

17.0%

IRPC

(Residents & non Residents)

32.0%

IRPS

Minimum 10.0%

Maximum 32.0%

WITHHOLDING TAX

(Dividends)

20.0%

Social Security: 4% (employer) 3% (employee)

TAX INCENTIVES

GENERAL BENEFITS

In Respect of Import of Goods:

Exemption from customs duties and VAT on

the import of capital equipment, spare and accessory parts.

In Respect of Income Tax:

Investment Tax Credit; Accelerated Depreciation ; Tax Deductions (Professional Training; Use of

new Technology)

TAX INCENTIVES

SPECIFIC BENEFITS

Creation of Basic Infrastructures; Trade and Industry in Rural Areas; Manufacturing & Assembly Industry; Agriculture and Fisheries; Hotels and Tourism Science and Technology Parks Large Scale Projects Rapid Development Zones Industrial Free Zones Special Economic Zones Mining Activities Oil & Gas operations

BILATERAL TREATIES & AGREEMENTS

South Africa

Germany

Algeria

Belgium

China

Cuba

Denmark

Egypt

USA

USA (OPIC)

Finland

France

Indonesia

Italy

Investment Promotion and

Reciprocal Protection

Agreements

Agreements to prevent Double

Taxation and Fiscal Evasion

Mauritius

Netherlands

Portugal

Sweden

United Kingdom

Vietnam

India

Switzerland

Zimbabwe

Spain

Japan

Brasil

Singapore

Turkey

Portugal

Mauritius

United Arab

Emirates

The Autonomous

and Special

Administrative

Region of Macau

Italy

South Africa

India

Botswana

Vietnam

Logistic

Industry of Agro-

processing

Small and Large

Scale Agriculture

Forest Plantation

Raillway/RoadTransport

Exploration

of Natural

Gas

Chemical

and Other

Industries

Development Scenarios for Nacala Corridor

PEDEC - NACALA ESTRATÉGIA DE DESENVOLVIMENTO ECONÓMICO DO CORREDOR DE NACALA

Integration between Natural Resources Development and Regional Development

• Driving Forces to Transform the Regional Economy and Space (Mineral Resources Development)

Tete Coal Development

Rovuma

Natural Gas

Development

Nacala Port and

Processing

Industries

13/51

Programs and Priority Projects

Point-1: Establish an acceptable and efficient regional / international

corridor for general cargo(other than coal)

Point-2: Prevent and minimize negative impacts on society /

environment and safety

Point-3: Utilize the improved transportation corridor to promote

regional development of the economy and society

232 Projects -92 High Priority projects

- 48 Essencials projects

3 Programs for specific areas

11 Programs by Sectors

Sectorial approach: 37 experts

Regional approach: 5 Provinces (Nampula, Niassa,

Cabo Delegado, Tete and zambézia (9 Districts)

Programs and Priority Projects

16

Food & Agro-industry

Clothing, Textile & Footwear

Non Metallic Minerals

Wood Processing & Furniture

Chemical, Rubber & Plastic

Metallurgical

Paper & Printing

Agrícultural

Minerals

Fishery

Energy

Forestry

Hydro

Strategic goals

Food Products (Flours, Pasta, Oils, Rice, Meat Fruits and Vegetables)

Feedstock

Beverages

School, military, hospital, industrial clothes

Footwear

Furniture (School, hospital, administrative), boats

Building Materials (windows, cement, doors,

zinc sheets)

Sanitary ware and decorative items, ceramics

Fertilizers

Paints, detergents, varnishes, plastic products

Fuels (Methanol, GTL and GPL)

Electric cables, ingots, automobiles, equipment,

packaging

Packaging, paperboard, school book, receipts

Trade & Industry

Key Sectors for the Promotion of Industrial Development

Agriculture e Food Security Land, Environment & Rural

Development

Sea, Fishery & Inland Water Transport & Communication

Public Works, Housing and

Water Resources

Work, Employment and Social

Security

Science, Technology,

Technical and Higher

Education

Education and Human

Development

Available Resources

PRIORITY INDUSTRIES– MAIN PRODUCTS

Banco Nacional de Investimento • 17

MOZAMBIQUE &

JAPAN COOPERATION

ENHANCEMENT

18

Establishment of JETRO Maputo

President Nyusi and Prime Minister Abe looked forward to the establishment of the JETRO office in Maputo in the joint statement. Japan-Mozambique Summit Meeting in

Tokyo, March 2017

Mozambique-Japan Business Forum in Tokyo Organized by JETRO, APIEX(CPI) and CTA

JETRO Maputo Opening Ceremony, October 20th 2017

Source: Ministry of Foreign Affairs

Copyright©2017 JETRO. All rights reserved. 19

Major business activities by Japanese Companies

CABO DELGADO

NAMPULA

NIASSA

ZAMBEZIA

SOFALA

GAZA

MAPUTO

TETE

MANICA

INHAMBANE

Japanese Companies based in Mozambique Projects which Japanese companies are involved

Maputo Province A-One Enterprises, Lda Marine Products(Process clams) Mozal Aluminum smelting (BHP Billiton 47%, Mitsubishi 25%, IDC 24%, Mozambique Government 4%) Maputo Gas Fired Combined Cycle Power Plant Development Sumitomo Corporation, IHI funded by JICA

Pemba

Palma

Nacala

Maputo City Trading House Mitsui Mitsubishi Sumitomo Marubeni Engineering and

Construction Chiyoda Penta Ocean Consulting/Service Nippon Koei Oriental Consulting Manaky Yahiro Mozambique ICHII Maputo LDA Delights Mozambique Renewable Energy Verde Africa

Tete Hitachi Construction Machinery

Mozambique Hitachi Construction 81%, Mitsubishi 19%

Moatize coal mine Vale 80%, Mitsui15%, EMEM 5% Revuboe coal mine Talbot 58.9%, Nippon Steal and Sumitomo Metal 33.3%,POSCO 7.8% ACWA Power Moatize Termoelectrica Mitsui15％、Acwa(Saudi Arabia) 70％、Vale 15%

Nampula Nacala Corridor Project Vale 35%,Mitsui 35%,CFM 30% Mineral Sand Mitsui

Moma

Beira

Cabo Delgado Mitsui E&P Mozambique

Area 1 Ltd Area1 ※Anadarko 36.5%, Mitsui 20%, ENH 15%, ONGC Videsh Ltd. 16%, Bhara 10%, , PTTE&P 8.5%, Oil India Ltd. 4% Area 4 JGC (Plant Engineering) Nippon Biodiesel Fuel(ADM)

• 17 Japanese companies are already based in Mozambique (As of October 2017)

• 4th biggest number in the Sub-Saharan African region after South Africa(128), Kenya(38), Nigeria(22))

Inhambane Temane Gas Fired Cycle Power Plant Sumitomo corporation(EPC)

Copyright©2017 JETRO. All rights reserved. 20

Contribution by Japanese companies to Mozambican economy

Export: 3,355 mil USD [2016] mil $ % of Total

Aluminum Products 887 26.4

Coal 719 21.4

Electricity 378 11.3

Natural Gas 276 8.2

Tabaco 206 6.1

Heavy Sand 190 5.7

Trade Balance( to Japan)

mil $ % of Total % change

Coal 104.7 82.8 +176.0

Vegetable oil 9.5 7.5 -28.1

Fish, Crustaceans 3.1 2.4 +46.0

Metals 3.1 2.4 -64.9

Precious stones 2.3 1.8 -18.4

Trade Balance(to World) Export: 78.1 mil $ [2015]→126.4 mil $[2016]

Source:Mitsubiushi, Mitsui, Sumitomo, JGC HP)

Data Source: Ministry of Finance, Japan

Mozal Project(Mitsubishi:25%) Moatize Coal Mine(Mitsui:14.25%)

Infrastructure Project in Nacala(Mitsui:35%)

Gas power Projects in Matola and Temane(EPC:Sumitomo)

Rovuma Basin Area 1 (Mitsui:20%) Area 4 (Engineering: JGC)

Data Source: Banco de Mozambique

Banco Nacional de Investimento • 21

OIL & GAS

CHALLENGES

Logistics Challenges

22

Logistic challenges(Hydrocarbons Industry):

I

II

III

Logistic Base in Pemba (“One-Stop Shop”)

Industrial City of Palma

Development of Local Content in the O&G Industry

IV Creation of Business Opportunities for SMEs

Logistics Challenges Pemba Oil & Gas Service Centre

23

• Pemba Oil & Gas Service Centre consists of an 8000 Ha concession area.

Logistics Challenges Available Services at Logistic Base of Pemba

24

• The location of Pemba for the Logistics Base allows to focus the provision of services in

one place, in an area that is to be considered as a special status in economic terms.

Logistic Base of Pemba’s Services:

Services/ Available Installations:

Commercial Port

Transit and logistics supply base

Subsea construction and fabrication yards

Spooling facility

Bunkering/Terminal facilities

Ship repair facilities

Waste treatment plant for drill cuttings and mud

Port, Residential and Commercial spaces Management;

Areas of downstream oil and gas activities, including a small LNG receiving terminal, Fertilizer, GTL, DME and Power Plants;

Spare land for future expansion.

Logistics Challenges Logistic Base of Pemba (“One-Stop Shop”)

25

• Pemba Oil & Gas Service Centre will meet all the below objectives and criteria

Project Operational Effenciency & Considerations:

Minimize overall Environmental Impact;

Achieve economies of scale & synergies between various sectors – Oil and Gas,

mining and industrial activities;

Proposed creation of Special Economic Zone – Port and associated facilities;

One-Stop-Shop and flexibility in shared port infrastructure and resources;

Reduce transport and handling cost and minimize risk of cargo damage (i.e. avoid

double handling);

Optimisation of support operations, 24/7 operations, quick turnaround of vessels;

Availability of sufficient area (8,000 Ha) for long term growth;

Act as regional distribution hub for east Africa.

Logistics Challenges Pemba Oil & Gas Service Centre

26

• Pemba Oil & Gas Service Centre already has a defined master layout plan.

Pemba Oil & Gas Service Centre

Sn Item Quay (m) Area (Ha)

1 Commercial Port incl. Container Terminal 800 90

2 Supply Base 2 500 300

3 Subsea Fabrication/Construction Yard 1 100 140

4 Spool Base 50 30

5 Bunkering / Terminaling Facility 800 20

6 Shipyard 250 30

7 Residential / Commercial Area 460

8 Downstream Industry 800

9 Spare land for further expansion 6 130

Total 5 500 8 000

Logistics Challenges Business Opportunities at Logistic Base of Pemba

27

• There are plenty of business opportunities in conjunction with ENHILS.

BUSINESS OPPORTUNITIES :

Setting up of :

• Container Terminal to support container terminal activities incluidng support export of minerals (graphite) from Balama

• Pipe coating Plant :

Anticorrosion coating of Line Pipe, Risers.

Concrete Weight Coating of Line

Thermal insulation of Line Pipe, Risers.

Coating of Bends and Fittings.

Field Joints and Repair Kits.

• Shipyard

• Dry Dock and Ship repair facility

• Bunkering &Terminaling Facility

• Training School

Container T/L

Pipe Coating Plant

Logistics Challenges Urbanization Plan of Palma (LNG Plant Facilities)

28

• The contiguous area of the LNG Project has around 18000 Ha and its development

responsability is linked to ENH Logistics, allowing for a set of very important initiatives for the

region, leveraging the proximity of the Rovuma Basin and the exploitation of Natural Gas.

Palma “Use of Land” Plan (DUAT):

LNG PLANT Project

Palma’s Urbanization Plan (18.000ha)

Industrial Park: 4.923 ha

Business Center: 609 ha

Congress Center: 534 ha

Services & Commerce: 256 ha

Housing & Equipment's: 3.532 ha

Tourism Buildings: 179 ha

Leisure & Sports: 3.276 ha

Ecological Park: 2.880 ha

Predicted Distribution

Illustrative Urbanization Plan for Palma (18.000 ha)

Logistics Challenges Business Opportunities at Pal

29

• Downstream Industries are also business opportunities in conjunction with ENHILS.

BUSINESS OPPORTUNITIES :

Setting up of :

• Downstream Industries;

Small LNG Receiving Terminal

Fertilizer

GTL (Gas to Liquid)

DME (Dimethyl Ether)

Power Plant.

Power Plant GTL Plant

DME Plant

Fertilizer

Logistics Challenges Major Opportunities in the Logistics Area

30

• Considering the development of the LNG Project and the Local Content Development

Initiative also commented before, we believe that there is a strong “operating ground” for

Small & Medium Sized companies (SMEs) to position themselves on a competitive perspective

to this Industry.

Logistics Opportunities:

Cargo & Personnel Transportation 1

Industrial Services 2

Infra-Structures & Construction 3

4 General Services

Shipping Lines;

Vessels Operators;

Airfreight Operators;

Transit & Supply Services;

Clearing & Forwarding;

Heavy Lift Transport.

Pipe Coaters;

Gas Marine Services;

Ship Repair;

Specialized Industry construction;

Drilling Services.

Marine Construction;

Cement Services;

Machinery;

Subsea Equipment;

Services & Tools;

Fabrication & Engineering.

Maintenance & Repair;

Catering;

Training & Recruiting;

Facilities Management;

Housing;

Environmental Services.

ROLE OF APIEX

• Banco Nacional de Investimento • 31

ROLE OF APIEX

NATURE

• Public institution

• Endowed with administrative and financial autonomy

MANDATE

• Promotion and facilitation of investment and exports

SUBORDINATION

• Minister of Industry and Trade

APIEX

APIEX´s PILLARS

FACILITATION DEVELOPMENT PROMOTION ADVISORY

33

HOW MAY APIEX ASSIST YOU?

OFFERS A PACKAGE OF SERVICES TO ASSIST NATIONAL AND FOREIGN

INVESTORS FACILITATING ACCESS TO INCENTIVES OFFERED BY THE

GOVERNMENT AND THE ESTABLISHMENT OF THEIR BUSINESSES.

Facilitation of

National

&Foreign

Investment

HAND IN HAND FOR

BETTER DEALS AND

INVESTMENTS

Tomas Matola • Banco Nacional de Investimento • 35

www.apiex.co.mz

Iwww.apiex.gov.mz +258 (21) 31 33 25

Rua da Imprensa 332 R/C

P O Box 4635

Maputo, Mozambique

+258 (21) 31 33 10

THANK YOU! MERCI BEAUCOUP!

ARIGATOU GOZAIMASU!